NITI Aayog (and erstwhile Planning Commission)
NITI Aayog versus the Planning Commission: constitutional status, structure, functions, cooperative federalism and the shift from plan-allocation to think-tank governance.
The Planning Commission (1950–2014)
The Planning Commission was established by a Cabinet Resolution dated 15 March 1950, not by the Constitution or any statute. It was therefore a non-constitutional, non-statutory, executive body. Its mandate flowed from the Directive Principles of State Policy, especially Article 39 (distribution of material resources to subserve the common good) and Article 38 (a social order for welfare). The Prime Minister was its ex-officio Chairman.
Its central instrument was the Five-Year Plan, the first of which (1951–56) followed a Harrod–Domar growth model and the second (1956–61) the Mahalanobis model prioritising heavy industry. Twelve Five-Year Plans ran until the Twelfth Plan (2012–17) was prematurely wound up. The Commission allocated central assistance to states through the Gadgil–Mukherjee formula (1991) and approved state plans — earning the charge that it acted as a 'super-cabinet' imposing a one-size-fits-all template on states.
The criticism and the transition
The National Development Council (NDC), created in 1952 and comprising the PM, Union ministers, Chief Ministers and Planning Commission members, was meant to give states a voice, but in practice the Commission's discretionary grants and tied-fund conditionalities concentrated power at the Centre. The Administrative Reforms Commission and successive economists faulted it for centralised, top-down planning ill-suited to a liberalised, post-1991 economy.
NITI Aayog (2015– )
The National Institution for Transforming India (NITI Aayog) was constituted by a Cabinet Resolution dated 1 January 2015, replacing the Planning Commission. Like its predecessor it is a non-constitutional, non-statutory executive body — a critical Prelims distinction. Its declared philosophy is 'cooperative and competitive federalism' and the role of a government think-tank rather than a fund-allocating authority. The power to devolve resources to states now rests with the Finance Commission (Article 280) and the Department of Expenditure, following the Fourteenth Finance Commission's recommendation (accepted 2015) raising states' share of the divisible pool to 42%.
NITI Aayog issues no Five-Year Plans. Instead it produced a Three-Year Action Agenda (2017–20), a Seven-Year Strategy and a Fifteen-Year Vision Document, aligning with Sustainable Development Goals. It runs flagship initiatives — the Aspirational Districts Programme (launched January 2018), the Atal Innovation Mission, the SDG India Index, the Health Index, and the Composite Water Management Index. It hosts the platform that subsumed the abolished bodies, and serves as the nodal agency for monitoring SDGs.
The core conceptual contrast a candidate must internalise: the Planning Commission allocated funds and approved plans top-down; NITI Aayog advises, designs policy, fosters inter-state competition and acts as a knowledge hub with no allocative power.
